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Transcript Summary

AirSculpt Technologies reported a transformative 2025, focusing on stabilizing operations and deleveraging its balance sheet. CEO Yogi Jashnani noted that same-store sales turned positive in early 2026, driven by a new marketing strategy and the expansion of services tailored to the GLP-1 patient demographic. The company is pivoting to meet demand for skin tightening and skin excision procedures, which represent a significant long-term revenue opportunity. CFO Michael Arthur, in his first call, addressed the delayed 10-K filing due to immaterial lease accounting corrections. Financially, 2025 revenue was $151.8 million, a 15.8% decrease, but cost-cutting efforts helped maintain a 10% adjusted EBITDA margin. For 2026, AirSculpt expects revenue between $151 million and $157 million, with no plans for new clinic openings as the focus remains on existing center productivity and debt reduction. Management highlighted a healthy liquidity position with leverage below 2.5x. Risks discussed include a challenging consumer spending environment and potential supply chain disruptions for helium plasma used in skin tightening. The company expressed confidence in its clinical results and its ability to capture the post-weight-loss aesthetic market.

5-year share-count history (top 10 holders by peak, incl. exited) + price

Revenue Segments

Filing Risk Scores

AirSculpt Technologies: Administrative Metadata Obscures Financial Reality

Full Earnings Call Transcript — Q4 • 2026-04-02

Operator: Greetings, and welcome to the AirSculpt Technologies, Inc. Fourth Quarter 2025 Earnings Call. [Operator Instructions] As a reminder, this conference is being recorded. It's now my pleasure to turn the call over to Allison Malkin of ICR. Allison, please go ahead.
Allison Malkin: Good morning, everyone. Thank you for joining us to discuss AirSculpt Technologies results for the fourth quarter and 2025 fiscal year. Joining me on the call today are Yogi Jashnani, Chief Executive Officer; and Michael Arthur, Chief Financial Officer. Before we begin, I would like to remind you that this conference call may include forward-looking statements. These statements may include our future expectations regarding financial results and guidance, market opportunities and our growth. Risks and uncertainties that may impact these statements and could cause actual future results to differ materially from currently projected results are described in this morning's press release and the reports we file with the SEC, all of which can be found on our website at investors.airsculpt.com. We undertake no obligation to revise or update any forward-looking statements or information, except as required by law. During our call today, we will also reference non-GAAP financial measures. We use non-GAAP measures in some of our financial discussions as we believe they more accurately represent the true operational performance and underlying results of our business. A reconciliation of these measures can be found in our earnings release as filed this morning and in our most recent 10-K, which will also be available on our website. With that, I'll turn the call over to Yogi.
Yogesh Jashnani: Thank you, Allison and good morning, everyone. I will begin with a review of our fourth quarter and fiscal year performance, followed by our progress on our strategic priorities, which have returned the business to stabilization and beginning in February inflected to positive same-store sales growth. I'll then provide an overview of our strong liquidity position reinforced by the actions we have taken over the past few months. Michael will then review our fourth quarter and fiscal 2025 financial performance and provide the 2026 outlook. Michael will also discuss what led to the delay in our 10-K filing. In the fourth quarter, we delivered sequential improvement in same-store sales versus the first 9 months of the year and higher adjusted EBITDA compared to Q4 2024. We also saw improvements in our lead and consult volumes, which has continued into 2026 and is now converting into improved revenue trends. Stepping back, 2025 represented a year of rebuilding and transformation. We added talent, improved business processes, implemented a new go-to-market strategy and added new procedures that expanded our market potential. In addition, we strategically exited our only clinic outside of North America to streamline operations. Finally, we strengthened our balance sheet, issuing equity and utilizing our ATM to meaningfully reduce our net debt. The result of this work is already evident. Our core business has stabilized with same-store sales improving from down 22% at the start of 2025 to positive in Feb 2026. Our trends continued favorably in March, and we expect Q1 same-store sales to be flat, which would be the midpoint of the revenue range previously provided. As we prepare for our busiest quarter, we are seeing broad-based improvement in revenue across our centers. This improvement is tied directly to the actions we took starting in Q4. Our achievements reflect strong progress advancing our strategic priorities. As a reminder, these include: first, introducing new services to capture our GLP-1 market opportunity; second, enhancing our sales and marketing strategy; and third, maintaining strong financial discipline, both with margins and capital allocation. Let me share an update on each. First, introducing new services to capture our GLP-1 market opportunity. GLP-1 medications have fundamentally reshaped how consumers' approach weight loss and wellness. They have also created demand for aesthetic procedures such as skin tightening, contour restoration and overall reshaping after weight loss, all of which play into our existing brand and capabilities. Fat removal and skin tightening represent some of the largest opportunities in aesthetics today. According to the American Society of Plastic Surgeons, skin tightening and skin removal market is as large as fat removal when measured in terms of procedures done in 2024. This gives us a $100 million-plus sales opportunity long term. You might recall, we rolled out stand-alone skin tightening to all centers in the second half of last year and introduced a skin excision pilot, also known as skin removal in Q4. Skin removal procedures represent another proof point of our expanded revenue opportunity. And while early, we are pleased with the performance of these additions. Patients are seeing great results, which is giving us terrific exposure as a destination for these procedures. Skin removal provides us with more levers to grow center productivity and utilization. Just in Q4 2025, we have completed more than 100 skin removal surgeries, and we expect this to ramp in 2026 as we expand this capability across all locations. We have also deployed marketing efforts to raise awareness of our unique positioning to serve these patients. These new procedures strengthen our body contouring service and revenue streams using our existing base of centers and clinic talent. Second, enhancing our sales and marketing strategy. Starting Q4 2025, we implemented an enhanced marketing strategy that is beginning to show measurable results. This included expanding into new mediums such as connected TV, increasing influencer engagement, launching focused campaigns for skin tightening and skin removal, improving website functionality and conversion flows and optimizing spend towards higher-value audiences. These marketing enhancements directly contributed to the recent improvement in volume trends, and we expect the momentum to continue. We have also improved our patient financing options to further drive conversion while maintaining our policy of full upfront payment. Turning to our third area of focus, maintaining strong financial discipline, both in our margins and capital allocation. As mentioned in the past, debt reduction has been the focus of our capital allocation strategy. We repaid over $30 million of debt over the last 5 quarters, bringing our leverage below 2.5 as of the current date. Operationally, we simplified the business and reduced costs, generating over $4 million in annualized savings in 2025 while reinvesting selectively in growth initiatives and talent. Speaking to talent, in the first quarter, we added highly experienced executives across finance, legal and operations with significant expertise in managing multiunit operations. These additions, along with our existing sales and marketing organization, provide us with a strong leadership team and the right structure to execute and deliver on our growth goals. In summary, the work completed in 2025 meaningfully repositioned the company, setting the foundation to support long-term sustainable growth by building the engine, infusing talent and strengthening our processes. Our strategy is starting to pay off. In 2026, we are experiencing accelerating sales and demand trends. Our priority is to execute consistently, build on this momentum and drive disciplined growth in order to create value for our shareholders. And with that, I will now pass it over to Michael.
Michael Arthur: Thank you, Yogi, and good morning, everyone. I'm pleased to join you today on my first conference call as CFO of AirSculpt. This morning, I will share my background and then provide perspective regarding the delay in our 10-K filing. Following this, I will review our 2025 fourth quarter and fiscal year results and 2026 outlook. I come to AirSculpt with experience across public, consumer and lifestyle businesses, most recently serving as Chief Financial Officer of Inspirato, a luxury subscription travel company. During my 3 years there, I helped lead a comprehensive turnaround, strengthening operating disciplines, improving margins and restoring profitability, which ultimately culminated in a take-private transaction at a 50% premium to the prevailing trading price. I chose to join AirSculpt for 2 primary reasons; first and foremost, the underlying economics and long-term opportunity of the business is highly compelling. AirSculpt combines strong unit level performance, a differentiated offering and a brand with the right to win in a growing aesthetics market. With attractive clinic level contribution margins and a significant white space for expansion, both geographically and across adjacent procedures, the platform is well positioned for sustained scalable growth; second, I was drawn to the team and the culture. There's an alignment across the organization to improve operational discipline, ensure accountability and create long-term value. It is clear the leadership team understands the opportunities ahead and the work required to unlock them. That level of focus and commitment is energizing to step into as the CFO. We have the right strategic initiatives underway to advance our turnaround, and I'm excited to partner with Yogi and his team to accelerate those efforts. Before I discuss business performance, I want to address a few reporting items that came up at year-end. During the close process, we identified a reconciliation matter related to intercompany transactions, which led us to conduct a broader review of certain accounting treatments, including lease accounting under ASC 842. As a result of that review, we recorded immaterial changes to prior year balances in our 10-K filing. This had no impact to revenue, cash or our day-to-day operations, and we remain fully compliant with our bank covenants. The correction included the gross up of our ROU asset and lease liability by approximately $3.8 million and $3.5 million, respectively, for the prior year ending December 31, 2024. Additionally, there was corrections to prior year rent expense that decreased expense by $239,000 in 2023 and $233,000 in 2024. We recognize these issues should have been identified earlier and hold ourselves accountable. We are taking steps to strengthen our financial processes and controls going forward. Now let me turn to a review of our fourth quarter. Revenue for the quarter was $33.4 million, down approximately 15% versus the prior year quarter. Same-store revenue, which excludes centers opened for less than a year, declined 16%. The decline in revenue reflects lower case volume amidst a challenging consumer spending environment. The percentage of patients using financing to pay for procedures was approximately 50%. As a reminder we received full payment for all procedures upfront, and we have no recourse related to patients who financed their procedures with third-party vendors. Cost of services decreased $3.1 million to $13.7 million, a decline of 18% compared to prior year period, contributing gross margin expansion of roughly 2% to approximately 59%. The Selling, General and Administrative expenses were approximately $18.2 million, a decline of approximately $5 million in the quarter compared to the same period in fiscal 2024. SG&A decline was primarily a byproduct of the cost initiatives taken throughout 2025, as Yogi called out earlier. Our customer acquisition cost for the quarter was roughly $3,300 per case flat to prior year quarter. Adjusted EBITDA was $2.5 million or 7.4% of revenue, an increase of $0.6 million and 2.8% margin expansion versus prior year, driven by gross margin expansion and operational leverage in SG&A. For the full year, we reported revenue of $151.8 million, a decrease of approximately 15.8% than fiscal 2024. Adjusted EBITDA was approximately $15 million, resulting in an adjusted EBITDA margin of approximately 10%. This compares to adjusted EBITDA of approximately $21 million or an adjusted EBITDA margin of 12% in fiscal 2024. Turning to our balance sheet. As of December 31, 2025, cash was $8.4 million. We paid down $19 million of debt in 2025, $14 million on the term loan and $5 million on the revolving credit facility. Gross debt outstanding was $56 million at year end. Under our credit agreement, our leverage ratio was below 3x and we are in compliance with all covenants at year-end. Furthermore, as Yogi mentioned, we raised an additional $14.8 million from the at-the-market facility in Q1 and paid down an additional $11 million of debt principal in the period. We expect to refinance our term loan before it becomes current, targeting a net debt leverage ratio below 2.5x. The cash flow from operations for the year was $3.1 million compared to $11.4 million in fiscal 2024. Turning to our outlook. In 2026, we expect revenue in the range of $151 million to $157 million. We expect the business to build momentum as the year progresses, but the midpoint of our revenue range, reflecting approximately 3% comparable growth, excluding London from 2025. As a reminder, our London center contributed 1% to comps in 2025. We expect fiscal 2026 adjusted EBITDA in the range of $15 million to $17 million. This outlook incorporates the benefit of improved revenue growth and the annualization of our 25 cost actions. At the same time, we plan to reinvest a portion of these savings in the targeted growth initiatives to support top line expansion. As it relates to de novos, while we have plenty of runway ahead to open new centers, our guidance does not contemplate any openings this year as we continue to focus our efforts and resources on revenue growth in our existing base. As many of you are aware, helium plasma continue to perform skin tightening procedures. While we maintain a diversified network of suppliers, a meaningful portion of the global supply is currently offline due to the Iran conflict. We are monitoring the situation closely, and we will manage the business accordingly. Lastly, before I turn it back to Yogi, I want to reiterate how excited I am to be part of AirSculpt and the leadership team and to engage with our investors. There is significant opportunity ahead, and I look forward to helping unlock long-term value for all shareholders. And with that, back to Yogi for closing remarks.
Yogesh Jashnani: Thank you, Michael. In conclusion, we begin 2026 with positive momentum and enhanced marketing strategy, strengthen liquidity and the opportunity for stronger future growth. With that, I'd like to turn the call over to the operator to begin the question-and-answer portion of the call.
Operator: [Operator Instructions] Our first question is coming from Josh Raskin from Nephron Research.
Joshua Raskin: I've got 2 here. I guess just first on the numbers. The guidance for 1Q, the revenues indicate a slight decline on a year-over-year basis, whereas full year 2026 revenue is expected to be up slightly. So I heard the building momentum commentary, but what's causing a little bit of that change in seasonality to make the revenues a little more back-end loaded this year?
Yogesh Jashnani: Josh, this is Yogi. Thank you for the question. Look, we are being measured in how we guide over here. The trends have improved meaningfully, as we mentioned, exiting the year and our trajectory has gone from down 2022, '24 to positive comps. That underpins our confidence in the full year outlook. But at the same time, we do recognize that we must deliver consistent results to make sure that we can hit our numbers, and we are focused on execution at the moment.
Joshua Raskin: Okay. Perfect. And then maybe if we could just take a step back, bigger picture on the body sculpting trends outside of GLP-1-related procedures, is there any way for you to isolate just sort of market-like trends for the core business prior to the skin tightening and skin removal in some of the new products?
Yogesh Jashnani: Josh, great question. We continue to see that the core business around body contouring and fat removal is holding relatively steady. I think all of aesthetics saw a bit of a boom coming out of COVID. And our belief is now we're also starting to find a baseline. Now with this industry, there is constant change, and we do see GLP-1s being the next wave of that change where we are well positioned to take advantage of that. And the demand that arises from skin laxity or loose skin does play really well into our brand and our capabilities. That's why you hear the focus on GLP-1s.
Operator: Thank you. Next question is from Sam Eiber from BTIG.
Sam Eiber: Maybe I can start on the excisional procedures. I think I caught in the prepared remarks about 100 procedures in Q4 as part of that pilot. I guess I would love to hear what you're hearing from customers and surgeons that were part of the pilot phase and then how that maybe is going to inform the go-to-market as this rolls out into more of a broader launch across all your centers?
Yogesh Jashnani: Sam, nice to talk to you as well. So what we are seeing is that we are able to provide excellent results for our patients. Our patients are coming in. They are getting good results from the procedures. We are -- as you know, for our procedures, it takes a few months before you see the final results, but the early signs are very encouraging. From surgeons as well, this is something that they are -- many of them are comfortable with. All of them are highly effective at it. So thus far, we are pleased with both the volume and also the quality of results that we are getting with the excisional procedures. As the year goes along, we would ramp it up. As a reminder, typically, these -- as I said, it takes about 3 months minimum to see the full results for a patient. So we want to make sure we look through those, make any corrections that are needed. Thus far, we've not seen anything major and then expand it from there.
Sam Eiber: Okay. That's very helpful. And maybe I can just squeeze a follow-up here on a question on the balance sheet. I know you guys paid down some debt this quarter, leverage ratio is down to 2.5x. I guess how should we be thinking about capital allocation going forward, appetite for continued debt paydown versus the comfort right now at the 2.5x?
Michael Arthur: Sam, this is Michael Arthur. Thanks for the question. Yes, we -- our #1 priority still is to get the balance sheet in a healthy position. And we've done a lot of that work over the last year or so. As I mentioned, we are in early stages, but looking to refinance the debt, but targeting around the levels we're at now and somewhere below net debt of 2.5x. Beyond that, the capital allocation strategy hasn't changed much, which is really investing back into the business, both on sales and marketing and then ultimately, probably not in 2025, but new de novos as well as we look to expand our clinic portfolio.
Operator: We've reached end of our question-and-answer session. I'd like to turn the floor back over to Yogi for any further closing remarks.
Yogesh Jashnani: Thank you, Kevin, and team, thank you for joining us this morning. I also want to thank the AirSculpt team and our network of surgeons that provide excellent care and results to our patients. Together, we are powering the next chapter in AirSculpt's growth. We look forward to sharing our progress when we report Q1 results.
Operator: Thank you. That does conclude today's teleconference webcast. You may disconnect your lines at this time, and have a wonderful day. We thank you for your participation today.